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Buy
a House with a
No-Money-Down
Mortgage
Loan |
If you’re in the market for a
new
home, you may see saving up for
20% of the cost of your home as a down
payment as a goal that you’ll never
achieve. When a no money down mortgage
is offered, it can seem like a
dream come true.
But it isn’t
always what it’s cracked up to be. You have to be
careful when applying for this kind of loan. Most
consumers today only put down a fraction of the cost of
their home – generally 3-5%.
When you don’t
make a down payment, you haven’t really invested in the
house. These loans are riskier to both the
consumer and the lender because the foreclosure rate is
higher than those who contributed their own down payment
(as opposed to a gift from a relative).
Still, if you know
you can handle the responsibility of making timely
monthly payments, a no money down option can be a
blessing if you can’t come up with a lump sum for a down
payment.
You can try to
qualify for a mortgage without a down payment using a VA
loan if you’re an active military member or
veteran. Even widows of military members can
qualify for a VA loan.
Another
no-money-down option is buying an owner-financed
home. If you buy directly from a home owner who is
willing to sell without a down payment, make sure you
consult an attorney for the paperwork.
If you already own
one home, and are buying another, you may be able to use
a home equity line of credit to purchase your second
home instead of having to save for a down payment.
Also, check into
federal programs such as HUD, which allows low income
families to purchase a home without having to save for
the occasion. Contact your state’s housing agency
and find out if they offer their own special financing
with no money down.
© 2004 - All Rights Reserved. Apex Personal Loans
Store does not assume any responsibility for the
accuracy or completeness of the above article. Please
consult a financial advisor for specific advice
pertaining to your particular situation.
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